Thursday, September 5, 2013

Amazon Invests in Distribution Power

Amazon is investing billions of dollars to expand its distribution capabilities...not just to accommodate aggressive growth but also for competitive/cost advantage in same-day delivery.

And it's figuring out ways of cramming more product into the same space and retrieving it more quickly. "We now get about twice as much product in this building [a new warehouse] as we would have four or five years ago," says the VP of worldwide operations and customer service. That translates to improved cost-efficiency, important because of Amazon's policy of free shipping for orders of $25 or more.

Interestingly, Amazon UK is amending its free shipping offer, excluding thousands of products just as the all-important year-end holiday buying season is about to start. Whether this change will remain as competitors crank up their holiday promos is uncertain.

Each Amazon warehouse employs thousands of people in multiple shifts...and with so many new warehouses, Amazon may be able to compete in product categories where others have had difficulty--such as grocery delivery. Maybe.

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